TIOL-DDT 2301 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><font color="#006600"><strong><strong><strong><strong><strong><strong><strong><strong><strong><img width="115" height="125" border="0" align="right" src="image/ddt/10yearsDDT.jpg" alt="" /></strong></strong></strong></strong></strong></strong></strong></strong></strong></font></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><font color="#006600"><strong><strong><strong><strong><strong><strong><strong><strong><strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=17063"><img width="175" hspace="5" height="120" border="0" align="right" src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2013.jpg" alt="DDT in Limca Book of Records" /></a></strong></strong></strong></strong></strong></strong></strong></strong></strong></font></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong><font color="#663399" size="3">TIOL-DDT 2301</font><br>
25.02.2014 <br>
Tuesday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">ACES Pains</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> is yet another way ACES can make you mad.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Recently an assessee got a letter from a Service Tax Superintendent.</font></p>
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<td bgcolor="#FFFF00"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On verification of ACES, it is noticed that you have defaulted in Service Tax payment of Rs. 40, 33,248/- in the year 2012-13. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this connection, it is requested to pay the same and submit the documentary evidence in support of your payment. If already paid, submit the details of payment and copies of tax paid challans. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The matter may be treated as most urgent. </font></p></td>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now of all the amounts paid, how will anyone, assessee, officer, God or ACES know what this 40 odd lakhs is all about. The assessees who have paid the taxes promptly and correctly will have to spend a lot of time convincing the Service Tax officials that he has indeed paid the taxes.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems in some Commissionerates, Commissioners have directed the officers to initiate recovery actions on these mysterious figures thrown up by ACES.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And we are talking of facilitation and simplification!</font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">India's Successful CAD Control Causes spurt on Gold Smuggling in Neighbouring Countries</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Shanghai Metals Market yesterday reported that <em>while India acquired success in trimming down the current account deficit (CAD) to controllable levels, India's neighbours are concerned over the rise in gold smuggling that has en-routed extensively to their countries now. The senior officials of Bangladesh, Pakistan and Sri Lanka have expressed their alarm on the rising gold smuggling in their countries over the year. The restrictions on gold import to India seems to have triggered the smugglers as they are looking out for new ways to sneak gold through India's neighbours.</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems these neighbouring countries want guidance from India to curb the issues of both CAD and gold smuggling.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Restrictions in sneaking gold to India had forced the smugglers to invent techniques in routing gold through Pakistan, Sri Lanka and Bangladesh. Smugglers were found to take advantage of importing gold to these countries where the import duty is less than 10 %. Distressed with the surge of gold import, the Sri Lankan Govt. has hiked their import duty to 10 % for the first time. Pakistan has also put a ban on gold import for the second time over the year. Pakistan Govt. in an effort to axe gold smuggling has announced a ban gold import for 30 days. However, there will be no restriction on Gold export from Pakistan.</font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs Officer as Smuggler?</font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TODAY'S</strong> Mid Day published from Mumbai carried a banner headline screaming:</font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/customs_2301.png" alt="Legal Corner Icon" width="547" height="389" hspace="5" border="0" align="center"></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise Day and Investiture – Seelam seeks simplification</font></strong></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/Seelam.jpg" alt="Legal Corner Icon" width="500" height="392" hspace="5" border="0" align="center"></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MINISTER</strong> of State for Finance (Revenue) JD Seelam said,</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Tax officials should act as a facilitator rather than tax administrators.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. There is a need to widen the tax base.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. There is need to simplify the tax procedure and make it more transparent.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Tax system should be stable so that entrepreneurs know well in advance about his tax liabilities.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Tax payment needs to be made a 'Status Symbol' in order to encourage taxpayers to make tax payment voluntarily.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This could be made a standard speech for all Finance Ministers and leaders of the Tax Department, which could be printed and distributed for the next fifty years. We have been hearing the same sermon for the last fifty years.</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Tax officials should act as a facilitator rather than tax administrators. <font color="#0000FF">How can they facilitate when they themselves are not sure and when nobody wants to take decisions</font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. There is a need to widen the tax base. <font color="#0000FF">Who should do this; who stopped you?</font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. There is need to simplify the tax procedure and make it more transparent. <font color="#0000FF">Who are you telling this to? Isn't this your job? And with the constant simplification in the last 50 years, you have made the laws so bulky, complicated and outright perverted. Any further simplification is scary.</font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Tax system should be stable so that entrepreneurs know well in advance about his tax liabilities. <font color="#0000FF">Again who should do this? The Minister or his officers?</font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Tax payment needs to be made a 'Status Symbol' in order to encourage taxpayers to make tax payment voluntarily. <font color="#0000FF">How do you do this when you consistently harass every honest taxpayer and when the taxpayer knows what happens to the taxes he pays.</font></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Well, Mr. Seelam the Hon'ble Minister of State for Finance was speaking at a function yesterday in New Delhi to mark the CENTRAL EXCISE DAY and to hold the Annual Investiture Ceremony for conferment of Presidential Award on officers of the Customs and Central Excise Department.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The function was attended by Revenue Secretary Sumit Bose, CBEC Chairperson Shanti Sundharam, top brass of the CBEC, probationers and retired officers.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Elsewhere in the country, junior officers spent the day protesting against the injustice meted out to them in the matter of service conditions, particularly promotions.</font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Applicability of 'Actual User Condition' for import of Maize (Corn) under TRQ</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Public Notice No.47 dated 18.5.2011, inter alia, had deleted 'Actual User' condition for imports under Tariff Rate Quota (TRQ) Scheme. This was challenged before the Hon'ble High Court of Andhra Pradesh in WAMP No. 447 of 2012 in WA No. 228 of 2012. The Hon'ble High Court of Andhra Pradesh had passed an interim order on 04.04.2012 (in para 30) as under:</font></p>
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<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">" ………… we grant interim relief prayed for by the appellant and hold that till the disposal of the writ petition the Public Notice No. 47 (RE-2010/2009-14 dated 18.5.2011 does not delete the Actual User condition on the import of maize (corn)(other than seed)."</font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In compliance with this interim order of Hon'ble High Court of Andhra Pradesh, the maize importers under TRQ would have to satisfy 'Actual User' condition till the writ petition is finally disposed <font color="#FF0000"><strong>off</strong></font> or until further order.</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2013/dgft13cir013.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Policy Circular No. 13 (RE-2013)/2009-2014, Dated: February 24, 2014</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">WCO wants Tech Attaches – CBEC invites</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> World Customs Organization has invited applications for two posts of Technical Attaches from CBEC. Willing officers should apply to CBEC latest by 6th March 2014.</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/vcacancy21_2014.pdf" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC F. No.A.35017/ /2014Ad.II, Dated: February 21, 2014</font></strong></a></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> – Wednesday's cases</font></strong></font></strong></font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left">Service Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">CENVAT – Sales Commission Services are not Input Services - If there is any conflict between jurisdictional High Court and CBEC circular, the decision of jurisdictional High Court is binding on department rather than CBEC circular: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Respondents had availed CENVAT Credit on Sales Commission Services obtained by them.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The adjudicating denied this credit but the Commissioner (A) allowed the appeal of the assessee accepting their contention that sales commission paid is an activity relating to their business incurred before the clearance of goods and that on the basis of orders procured by the commission agent, clearances are made.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In appeal before the CESTAT, the Revenue submitted that the 'sales commission services' cannot fit into the definition of 'Input service' u/r 2(l) of CCR, 2004 in view of the Gujarat High Court decision in the case of<em> M/s. Cadila Healthcare Ltd.</em> - <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=43&filename=legal/hc/2013/2013-TIOL-12-HC-AHM-ST.htm" target="_blank"><font size="1">2013-TIOL-12-HC-AHM-ST</font></a></strong>.</font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether Sec 10A benefits are available in case a partnership firm gets converted into company with partners becoming shareholders and dissolution of firm involves no transfer of assets - YES: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is engaged in the business of exporting software having its Unit at Software Technology Park. The assessee-Company had filed return of income claiming 100% exemption under Section 10A of the Act. The Assessing Officer verified the records and found that the assessee was originally a partnership firm formed on 29-11-1993. Subsequently, it was reconstituted in the year 1995 as well as in the year 1997. The name of the firm was changed from M/s. Foresee Software Consultant to M/s. Foresee Information Systems on 22-08-1995. From the year 1995-96, the firm was exporting software to the US based company M/s. Effone Software Inc., and it had claimed deduction under Section 80HHE from the assessment year 2000-01 and continued up to 2002-03. On 24-07-2001, the Partnership Firm was converted into a Company and the same business was continued after conversion of the Firm into company.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE issue before the Bench is - Whether Sec 10A benefits are available in case a partnership firm gets converted into a company with partners becoming shareholders and dissolution of firm involves no transfer of assets. And the verdict favours the assessee.</font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Boric Acid imported for non-insecticidal purpose - in view of Sect 38 of Insecticides Act appellants are not required to obtain any permission from Ministry of Agriculture - Accordingly, they are entitled for benefit of DGFT Notifn 2/2006 and eligible for benefit of DFIA Scheme: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellant imported a consignment of Boric acid under DFIA scheme and claimed duty free benefits. As per the provisions of DGFT Notification no. 2 (RE-2006)/2004-2009 dated 07.04.2006 boric acid for non-insecticidal purpose falling under Chapter 2810 0020 is freely importable subject to production of an import permit issued by the Central Insecticide Board and Registration Committee under the Ministry of Agriculture.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As the appellant failed to produce such permission, therefore, goods were confiscated and were allowed to be redeemed on Redemption Fine and Payment of duty. Penalty of Rs. 2 lakhs was also imposed.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The said order was challenged by the importer and the Commissioner (Appeals) reduced the Redemption Fine and penalty but rest of the Adjudicating Authority's order was confirmed.</font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Tomorrow for the judgements</font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day.</font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com</strong></a></font></p>
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